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ARTICLE · 29 SEPTEMBER 2016

Contract Value Or Fair Value?

Baker Newman Noyes
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In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960)...

United StatesAccounting and Audit
J. Morgan Smith, CPA
J. Morgan Smith, CPA

In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965); (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. While the ASU is effective for fiscal years beginning after December 15, 2015, early adoption is permitted, and many plans are choosing to early-adopt due to the simplification of disclosures and relevance to the financial statement users.

Part II and Part III of the ASU reduce investment related disclosures and simplify accounting for plans with a fiscal year end that does not coincide with a calendar month end. These changes are related to the overall simplification of financial statement disclosures and enhancement of relevance to financial statement users. (See

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